China is not taking the Trump administration’s tariffs sitting down. On Tuesday, shortly after the 10% tariffs took effect past midnight on the U.S. East Coast, Beijing unveiled a series of countermeasures aimed at American industries, particularly energy and technology.
Countermeasures and Trade Restrictions
China’s response includes 15% tariffs on U.S. coal and liquefied natural gas (LNG), along with 10% tariffs on crude oil, farm equipment, and specific vehicles. These counter-tariffs are scheduled to take effect on February 10.
In a statement, China’s finance ministry denounced the U.S. tariffs as violations of World Trade Organization (WTO) rules, arguing that they disrupt normal economic and trade relations rather than resolving America’s own economic concerns.
Additionally, China’s market regulator launched an anti-monopoly investigation into Google, while the commerce ministry and customs administration jointly imposed fresh export controls on select rare metals, including tungsten, indium, and molybdenum.
The ministry also placed two U.S. firms—PVH Group and Illumina, Inc.—on its “unreliable entity” list, citing their violations of market principles and discriminatory actions against Chinese businesses. PVH is the parent company of major brands such as Tommy Hilfiger and Calvin Klein.
These retaliatory measures were announced without explicit mention of the U.S. tariffs.
Trump’s Justification and Canada-Mexico Delay
President Donald Trump signed off on the tariffs against China, Canada, and Mexico over the weekend, aiming to pressure these nations to curb illegal drug trafficking—including fentanyl—and migration to the U.S. However, the tariffs on Mexico and Canada have been temporarily postponed for at least a month following last-minute negotiations in which both countries agreed to strengthen border security.
Analyzing China’s Retaliation Strategy
Julian Evans-Pritchard, head of China economics at Capital Economics, characterized Beijing’s response as “fairly modest.” He estimated that the targeted U.S. goods represent approximately $364
R6,918.50 billion (R7 trillion) in annual imports—around 12% of China’s total U.S. imports—a small fraction compared to the over $8
R152.05.2 trillion (R158 trillion) in Chinese goods subject to the 10% U.S. tariff.
Evans-Pritchard noted that China’s approach appears calibrated to deliver a strong message while avoiding excessive economic damage and maintaining room to de-escalate if necessary. However, he warned that the strategy could backfire by prompting Trump to escalate tariffs further.
A Deepening Standoff
Evans-Pritchard also emphasized that resolving the trade standoff could prove difficult due to the deeper economic and political grievances between the two superpowers, in contrast to the relatively simpler disputes between the U.S. and its North American neighbors.
China remains a key supplier of precursor chemicals for fentanyl production, and Beijing insists it has made efforts to curb illicit shipments to the U.S. In response to Trump’s latest tariffs, China warned that such actions would harm prospects for future cooperation and vowed to challenge them at the WTO. Meanwhile, Trump has hinted at the possibility of further tariff hikes against China.
High-Level Talks on the Horizon
White House spokesperson Karoline Leavitt confirmed that Trump was scheduled to speak with Chinese President Xi Jinping within the next 24 hours, a conversation that could shape the next phase of the escalating U.S.-China trade war.
